Where a tax authority imposes and notifies the remaining amount after deducting the amount already paid as global income tax from the amount of global income as a result of re-determination of the tax base and amount of global income tax due to a change in the amount of income generated from disposal of income, whether a tax authority’s disposition of imposing taxes on the amount of withholding

Article 32 (5) (see current Article 67) of the former Corporate Tax Act (amended by Act No. 5581 of Dec. 28, 1998), Article 94-2 (1) 1 (see current Article 106 (1) 1) of the former Enforcement Decree of the Corporate Tax Act (amended by Presidential Decree No. 15686 of Feb. 4, 1998), Article 20 (1) 1 (c) of the former Income Tax Act (amended by Act No. 5580 of Dec. 28, 1998)

Supreme Court Decision 74Da1254 delivered on October 8, 1974 (Gong1974, 8073) Supreme Court Decision 80Nu288 delivered on October 13, 1981 (Gong1981, 1448) Supreme Court Decision 83Nu540 Delivered on April 10, 1984 (Gong1984, 842)

Plaintiff (Law Firm New Walls, Attorneys Choi Won-won et al., Counsel for the plaintiff-appellant)

Head of Yongsan Tax Office

Seoul High Court Decision 2004Nu9601 delivered on May 11, 2005

The part of the judgment of the court below against the defendant concerning global income tax for the year 1996 shall be reversed, and the judgment of the court of first instance shall be revoked, and the lawsuit concerning the corresponding part shall be dismissed. Of the part against the plaintiff as to global income tax for the year 1997, the part against the plaintiff as to global income tax for 358,681,768 won and 381,431,236 won shall be reversed, and the judgment of the court of first instance shall be revoked, and the lawsuit concerning the corresponding part shall be dismissed. All remaining appeals by the plaintiff and the defendant shall be dismissed. The total costs of the lawsuit shall be three-minutes, and the remainder shall be borne by the plaintiff and the defendant respectively.

1. Determination and ex officio determination of the Defendant’s grounds of appeal as to KRW 412,79,274 among the part against the Defendant regarding global income tax for 1996 and the part against the Plaintiff regarding global income tax for 197 and KRW 358,681,768 among the part against the Defendant and the part against the Defendant for 381,431,236 among the part against the Defendant

If a withholding agent pays withholding tax on wage and salary income subject to withholding, the tax liability of a withholding agent shall be extinguished within the scope of payment, and thus, the income earner shall not be imposed as global income tax on the income earner (see Supreme Court Decisions 74Da1254, Oct. 8, 1974; 80Nu288, Oct. 13, 1981; 83Nu540, Apr. 10, 1984, etc.). Thus, where the tax authority re-determines the tax base and tax amount of global income tax for a specific year on the income reverted to the person to whom the income belongs due to a change in the income amount from disposal of income, and then imposes and notifies the remaining amount after subtracting the tax amount paid as global income for the corresponding year as global income tax, the portion corresponding to the tax amount paid as withholding tax shall be deemed to have already been extinguished, and thus the disposition of imposition of global income tax on such income shall not be deemed to have been taken.

The court below found that the director of the military tax office included the purchase price of 2,018,410,00 won (1,039,930,000 won in 196 +978,480,480,000 won in 1997) and the sale price of 880,000,000 won in forest land in this case in 1997 as bonus for the plaintiff who is an executive officer of the non-party corporation, as well as the amount equivalent to the above included amount in the gross income in the gross income in the gross income in the gross income in the gross income in the non-party corporation and the non-party corporation in the gross income in the non-party corporation in the gross income in the non-party corporation in the gross income in the 197th and 197th and the 197th and 197th and 3th and 197th, the amount of global income tax in the year 205, the non-party corporation in the gross income tax in the year in question 197636.

If the facts are the same, in light of the legal principles as seen earlier, the Defendant cannot be deemed to have imposed a tax on the instant withheld portion, and accordingly, the revocation claim against the said portion shall be deemed unlawful.

Nevertheless, the court below decided the validity of the plaintiff's claim seeking its revocation on the premise that the defendant's disposition was made on the tax withholding amount of this case. The court below accepted the plaintiff's claim and rejected the plaintiff's claim for 358,681,768 won during the 1997 portion and 381,431,236 won during the 196 portion and the 1997 portion. Thus, the court below erred in the misapprehension of legal principles as to withholding tax, which affected the conclusion of the judgment. This part of the judgment below cannot be maintained.

2. Judgment on the Plaintiff’s ground of appeal as to the remaining part against the Plaintiff

In light of the records of this case, after compiling the evidence employed by the court below, it is just to determine that the plaintiff actually acquired the forest land of this case to the non-party corporation at the time of the original adjudication, which was owned by the non-party corporation, without any compensation. There is no violation of law such as incomplete hearing or violation of the rules of evidence, as otherwise alleged in the ground of appeal by the plaintiff

3. Determination on the part against the remaining defendant

There is no indication in the Defendant’s petition of appeal or appellate brief on this part of the grounds for appeal.

4. Therefore, with respect to global income tax for the year 196 of the judgment below against the defendant, the part of withholding tax amounting to 412,79,274 among the part against the defendant, and with respect to global income tax for the year 1997 of the judgment below, the part of withholding tax amounting to 358,681,768 won among the part against the plaintiff and the part against the defendant, and 381,431,236 won among the part against the defendant, shall be reversed, and the part of the case shall be remanded to the Supreme Court for a direct judgment, and the judgment of the first instance corresponding to that part shall be revoked, and the lawsuit shall be dismissed, and all remaining appeals by the plaintiff and the defendant shall

Justices Park Si-hwan (Presiding Justice)